Currently, fraud detection is a complex and manually intensive process that involves culling through billions of transactions to identify activities. Fraud is difficult to detect. Fraud detection is not an exact science and oftentimes transactions from good customers are declined in the process, thereby negatively impacting customer relations. The timeliness of fraud detection is also a major concern. If fraudulent activities are not detected early enough, fraudsters can make a major impact and cause substantial losses to customers, merchants, financial institutions and other entities.
Network intrusions and database attacks are larger, more frequent and more sophisticated. Data compromises are costing an exemplary financial institution and other players from $3 million to $25 million, and usually more, in gross fraud per month.
Oftentimes, fraud is only detected after the compromise has cost card members, merchants, card associations, and/or financial institutions millions of dollars.
Other drawbacks may also be present.